Association for Accessible Medicines v. Raoul

THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

ASSOCIATION FOR ACCESSIBLE )

MEDICINES, )

)

Plaintiff, ) No. 24 C 544

v. )

) Chief Judge Virginia M. Kendall

KWAME RAOUL, in his official capacity )

as Attorney General of the State of Illinois, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiff, Association for Accessible Medicines (“AAM”), seeks to enjoin the Illinois

Attorney General’s enforcement of House Bill 3957 (“the Act”) against its members based on out-

of-state transactions claiming the Act violates the dormant Commerce Clause’s prohibition against

extraterritorial state legislation. (Dkt. 51). For the below reasons, the Court denies AAM’s Motion

for Preliminary Injunction [51].

BACKGROUND

AAM is the leading trade association representing generic and biosimilar drug

manufacturers and distributors. (Dkt. 35 ¶ 14). Several states—Illinois included—have passed

laws regulating the price of generics and biosimilars. These measures have largely been responsive

to skyrocketing drug prices, sometimes by more than 1,000%, and sometimes overnight. (See Dkt.

58 at 6). The Illinois legislature’s solution is to regulate the “wholesale acquisition cost” of certain

generic and biosimilar products that are eventually sold in-state. (Id. at 7). Specifically, the Act—

which took effect on January 1, 2024—prohibits manufacturers and wholesale drug distributors

from “engag[ing] in price gouging.” 410 Ill. Comp. Stat. 725/10(a). The Act defines price gouging

as:

[A]n unconscionable increase in a prescription drug’s price that: (1) would result

in the wholesale acquisition cost of a 30-day supply of the essential off-patent or

generic drug exceeding $20 and would result in an increase in the wholesale

acquisition cost of the essential off-patent or generic drug of: (A) 30% or more

within the preceding year; (B) 50% or more within the preceding 3 years; or (C)

75% or more within the preceding 5 years; and (2) is otherwise excessive and

unduly burdens consumers because of the importance of the essential off-patent or

generic drug to their health and because of insufficient competition in the

marketplace.

Id. § 5. Excluded from the definition are “reasonably justified” price hikes stemming from

increased production costs or costs incurred to expand access to a specific drug. Id. The Act directs

the Attorney General to investigate possible instances of price gouging and further provides that

Illinois courts may order generic manufacturers to cease sales that violate the Act, disgorge money

acquired because of a price increase that violates the Act, and pay a civil penalty of up to $10,000

per day for each violation of the Act. See id. § 10(c)(2), (3), (5).

In regulating the wholesale acquisition cost of these drugs, Illinois targets upstream sales

rather than direct sales to Illinois consumers. This is largely a function of how the U.S. prescription

drug industry is structured. Drug manufacturers rarely sell their products directly to patients;

indeed, they rarely even sell to pharmacies. (Dkt. 52 at 3). Instead, manufacturers ordinarily “sell

nationally, to wholesale distributors, who resell to pharmacies, who in turn resell to patients.” (Dkt.

52 at 3). The price of that first sale, from manufacturer to distributor, is the wholesale acquisition

cost and “serves as a benchmark for the price of a specific drug.” (Dkt. 58 at 2).

Three companies control over 90% of the wholesale distribution market, and none of them

are based in Illinois. (Dkt. 52 at 3). So, when an out-of-state generic manufacturer sells product X

to a wholesale drug distributor, that transaction will almost always involve two non-resident

entities and occur entirely outside of Illinois. But if the wholesaler sells product X to a pharmacy

that, in turn, sells product X in Illinois, the Act can be enforced against the manufacturer based on

the price of the initial sale. See 410 Ill. Comp. Stat. 725/10(c) (“[A] manufacturer or wholesale

drug distributor who is alleged to have violated this Act may not assert as a defense that the

manufacturer or wholesale drug distributor did not directly sell a product to a consumer residing

in Illinois.”).

AAM claims the Act violates the dormant Commerce Clause, the Due Process Clause of

the Fourteenth Amendment, and the Constitution’s horizontal separation of powers. (Dkt. 35 ¶¶

78–108). The Court granted the Attorney General’s first Motion to Dismiss because AAM failed

to allege facts sufficient to confer standing and likewise failed to allege a credible threat of

prosecution. (Dkt. 32). The Court subsequently found that AAM’s First Amended Complaint cured

these deficiencies. (Dkt. 46). While AAM’s Complaint alleges six independent causes of action,

the throughline is whether the Constitution permits Illinois to regulate the prices of wholly out-of-

state sales. (Dkt. 46 at 5).

Now, in its renewed Motion for Preliminary Injunction, AAM asks the Court to enjoin the

Act based on Count One of its Complaint, which alleges the Act violates the dormant Commerce

Clause’s prohibition against extraterritorial state legislation. (See Dkt. 52 at 8; Dkt. 62 at 2).

Touching on the remaining Counts in its Complaint, AAM suggests that other parts of the

Constitution prohibit “direct state regulation of out-of-state transactions.” (Dkt. 52 at 8 n.15). But

AAM does not advance any of those separate theories in its Motion for Preliminary Injunction—

they are thus surrendered for the purposes of this motion. See Cassell v. Snyders, 990 F.3d 539,

551 (7th Cir. 2021); see also Halgren v. City of Naperville, 577 F. Supp. 3d 700, 726–27 (N.D. Ill.

2021).

DISCUSSION

“A preliminary injunction is ‘an exercise of a very far-reaching power, never to be indulged

in except in a case clearly demanding it.’ ” Finch v. Treto, 82 F.4th 572, 578 (7th Cir. 2023)

(quoting Cassell, 990 F.3d at 544). To obtain a preliminary injunction, the moving party must

show that (1) it is reasonably likely to succeed on the merits; (2) no adequate remedy at law exists;

and (3) it will suffer irreparable harm absent an injunction. Speech First, Inc. v. Killeen, 968 F.3d

628, 637 (7th Cir. 2020). If the moving party establishes these threshold requirements, the Court

will balance the equities, “weighing the harm to the moving party if the requested injunction is

denied against the harm to the nonmoving party and the public—including third parties—if it is

granted.” Finch, 82 F.4th at 578; see also Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20

(2008). Likelihood of success on the merits is often the decisive factor. Braam v. Carr, 37 F.4th

1269, 1272 (7th Cir. 2022).

I. Likelihood of Success on the Merits

AAM contends Illinois’s direct regulation of out-of-state commerce is plainly

unconstitutional under the dormant Commerce Clause.

Congress has the power to “regulate Commerce . . . among the several states.” U.S. Const.

art. I, § 8, cl. 3. But the Commerce Clause has long been understood to include a negative

command, one that prohibits states from passing laws that “unduly restrict interstate commerce.”

Tenn. Wine & Spirits Retailers Ass’n v. Thomas, 588 U.S. 504, 514 (2019). The dormant

Commerce Clause’s existence is uncontroversial; its boundaries are not.

Two primary dormant Commerce Clause strands “guide the courts in adjudicating cases

challenging state laws[.]” South Dakota v. Wayfair, 585 U.S. 162, 173 (2018). First, state laws

may not “discriminate against interstate commerce.” Id. Second, state laws may not “impose undue

burdens on interstate commerce.” Id. The “antidiscrimination principle lies at the ‘very core’ of .

. . dormant Commerce Clause jurisprudence.” Nat’l Pork Prods. Council v. Ross, 598 U.S. 356,

369 (2023) (quoting Camps/Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 581

(1997)). It serves to ward off state laws and regulations that are designed to “benefit in-state

economic interests by burdening out-of-state competitors.” Dep’t of Rev. of Ky. v. Davis, 553 U.S.

328, 338 (2008) (quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273–74 (1988)). Laws

that impose burdens on interstate commerce without facially discriminating against it, on the other

hand, are subject to a more flexible test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137

(1970). Under Pike, a facially neutral state law that serves a legitimate local interest may

nonetheless violate the dormant Commerce Clause if the burden it imposes on out-of-state

commerce is “clearly excessive in relation to the putative local benefit.” Id. at 142. AAM does not

invoke either principle in its Motion for Preliminary Injunction. Instead, it argues the Act is

unconstitutional under a third dormant Commerce Clause precept, one that prohibits “state laws

that directly regulate out-of-state commerce.” (Dkt. 52 at 13).

Courts have referred to this third dormant Commerce Clause strand as the

“extraterritoriality principle.” See, e.g., Energy & Env’t Legal Inst. v. Epel, 793 F.3d 1169, 1172

(10th Cir. 2015) (Gorsuch, J.) (referring to the “extraterritoriality principle” as the “least

understood” and “most dormant” strand of commerce clause jurisprudence). It was featured most

recently in a Supreme Court case involving a California law that prohibited the in-state sale of

pork products if they came from pigs that were cruelly confined. Ross, 598 U.S. at 365–66. Out-

of-state pork producers advanced an “almost per se rule forbidding enforcement of state laws that

have the practical effect of controlling commerce outside the State, even when those laws do not

purposely discriminate against out-of-state economic interests.” Id. at 371 (citation modified). The

Court unanimously rejected this “practical effects” argument and eventually upheld the California

law regardless of its out-of-state consequences.1 Id. at 371–76. This case, however, presents an

inverse of Ross. Where the California law in Ross regulated in-state commerce based on upstream

conduct, the Act regulates upstream commerce based on downstream effects. Accordingly, AAM

contends the Act is unconstitutional before and after Ross—at least to the extent it applies to wholly

out-of-state sales between non-residents of Illinois. (Dkt. 52 at 13–14). This basic premise has

some force. Indeed, the Ross majority was careful not to “trivialize the role territory and sovereign

boundaries play in our federal system” and emphasized the need for courts to “referee disputes

about where one State’s authority ends and another’s begins.” Ross, 598 U.S. at 378. But AAM’s

reliance on dormant Commerce Clause extraterritoriality presents several complex issues.

One key to AAM’s argument is the Supreme Court’s plurality opinion in Edgar v. MITE

Corp., 457 U.S. 624 (1982). There, four justices signed onto the proposition that the dormant

Commerce Clause prohibits a state from directly regulating transactions that take place “wholly

outside the State.” Edgar, 457 U.S. at 641–43. The Ross majority stopped short of recognizing this

theory as a continuing strand of dormant Commerce Clause jurisprudence. Instead it elided Edgar

considering the California law only targeted in-state sales. See Ross, 598 U.S. at 376 n.1. But the

majority simultaneously noted that commentators have questioned whether the state law at issue

in Edgar “posed a dormant Commerce Clause question as much as one testing the territorial limits

of state authority under the Constitution’s horizontal separation of powers.” Id. In other words,

Ross does not squarely address whether the dormant Commerce Clause itself prohibits a state from

regulating out-of-state transactions based on their downstream consequences. See Bradley W.

Joondeph, The “Horizontal Separation of Powers” After National Pork Producers Council v. Ross,

1 The more fractured portion of the Court’s decision in Ross focused on the continuing viability, force, and scope of

Pike balancing, but that analysis is irrelevant to the extraterritoriality challenge AAM raises in this case.

61 San Diego L. Rev. 45, 78–79 (2024) (noting Ross “glided past” issues concerning “the

substantive content of the Constitution’s prohibition on extraterritorial state legislation”).

While Ross did not answer the precise question this case presents, it offered a robust

discussion on three cases that have long been linked to the extraterritoriality principle. Those

cases—Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935); Brown–Forman Distillers Corp. v.

N.Y. State Liquor Auth, 476 U.S. 573 (1986); and Healy v. Beer Instit., 491 U.S. 324 (1989)—all

involved state price control or price affirmation laws that the Court held violated the dormant

Commerce Clause. Baldwin struck down a New York price control law barring out-of-state

producers from selling milk in New York unless they charged the minimum price guaranteed to

in-state producers. See Baldwin, 294 U.S. at 519–22. Brown-Forman and Healy involved laws that

required out-of-state distillers and brewers to affirm their in-state prices were no higher than out-

of-state prices. See Brown-Forman, 476 U.S. at 576–78; Healy, 491 U.S. at 326–29. The pork

producers in Ross relied on language from all three opinions that suggested, in isolation, the Court

decided the Baldwin–Healy cases on the grounds that the state laws they addressed impermissibly

controlled commerce occurring wholly beyond each state’s boundaries. Ross, 598 U.S. at 373. But

the Ross Court unanimously agreed that the petitioners’ “read too much into too little” from the

Baldwin–Healy cases. Ross, 598 U.S. at 373. Instead, the Court clarified that these cases did not

prohibit extraterritorial legislation writ large, but only legislation with a “specific impermissible

extraterritorial effect” tracing directly back to the antidiscrimination principle. Id. at 374. Indeed,

a closer examination of the cases reveals three laws that were plainly designed either to protect an

in-state industry (Baldwin) or to hoard commerce for in-state merchants (Brown-Forman and

Healy). See id. at 372–73.

The problem this poses for AAM is that the Act does not discriminate on out-of-state

interests. It regulates the price of drugs sold in Illinois, without regard for where they are

manufactured. (Dkt. 58 at 11). And the Act in no way favors Illinois corporations or manufacturers,

or discourages consumers from engaging with merchants across state lines. Without a protectionist

tilt, the Baldwin–Healy cases are of virtually no use to AAM in its attack on the Act under the

dormant Commerce Clause. As far as Supreme Court cases go, that leaves AAM to rely entirely

on the Edgar plurality—and perhaps the footnote in Ross discussing it—for the proposition that

the dormant Commerce Clause prohibits nondiscriminatory state laws that directly regulate out-

of-state commerce. Against this murky backdrop, AAM contends that two Seventh Circuit cases

relying on the extraterritoriality principle control the outcome.

Read in a vacuum, the Seventh Circuit’s decisions in Legato Vapors v. Cook, 847 F.3d 825

(7th Cir. 2017) and Midwest Title Loans, Inc. v. Mills, 593 F.3d 660 (7th Cir. 2010), certainly

support AAM’s position. In Legato Vapors, the court struck down an Indiana law that imposed

significant regulatory burdens on out-of-state e-cigarette liquid manufacturers and distributors.

Legato Vapors, 847 F.3d 827–28. The court reasoned the law was unconstitutional for the sole

reason that it governed transactions that “occur[ed] entirely outside the regulating state.” Id. at

836. This was so despite “obvious concerns about [the law’s] protectionist purposes.” Id. at 833.

The court declined to rest its decision on the antidiscrimination principle because, in its view, the

law was clearly unconstitutional extraterritorial legislation. Id. Legato Vapors followed Midwest

Title, which struck down another Indiana law that regulated out-of-state title companies making

loans to Indiana residents. Midwest Title, 593 F.3d at 664–68. There again, the court found the

state statute ran afoul of the dormant Commerce Clause, not because of any discriminatory

purpose, but because Indiana was attempting to directly “regulate activities in other states.” Id. at

665.

Before Ross, Legato Vapors and Midwest Title would probably control this Court’s

likelihood of success on the merits analysis. But both cases heavily relied on Baldwin and its

progeny to support one major legal proposition: that, protectionism aside, the dormant Commerce

Clause prohibits the direct regulation of wholly out-of-state commerce. See Legato Vapors, 847

F.3d at 829–30; Midwest Title, 593 F.3d at 665–66. After Ross, this conception of the Baldwin–

Healy cases is no longer accurate, and casts doubt the court’s conclusions in both cases.

Nonetheless, AAM points to a handful of nearly identical state laws that courts have struck

down both pre- and post-Ross as violating the dormant Commerce Clause. See, e.g., Ass’n for

Accessible Meds. v. Frosh, 887 F.3d 664 (4th Cir. 2018); Ass’n for Accessible Meds. v. Ellison,

140 F.4th 957 (8th Cir. 2025); Ass’n for Accessible Meds. v. Bonta, 766 F. Supp. 3d 1020 (E.D.

Cal. 2025). The Court has carefully considered these out-of-circuit cases and finds their reasoning

unpersuasive. By way of example, the Eighth Circuit’s decision in Ellison upheld an injunction on

a similar Minnesota law regulating generic drug pricing. Ellison, 140 F.4th at 961. It reasoned that,

under Ross, Baldwin, and Healy, the Minnesota law had the “specific impermissible extraterritorial

effect of controlling the price of wholly out-of-state transactions” and that, under these

circumstances, no showing of discrimination or protectionism was required. Id. at 961. This is a

misreading of Ross. See N.J. Staffing Alliance v. Fais, 110 F.4th 201, 207 (3d Cir. 2024) (“[T]he

dormant Commerce Clause does not prohibit laws solely because they have extraterritorial reach

absent protectionist intent or effect.”); Ass’n des Eleveurs de Canards et d’Oies du Quebec v.

Harris, 729 F.3d 937, 951 (9th Cir. 2013) (finding Healy and Baldwin only applicable to

protectionist price control and price affirmation statutes). The “specific impermissible

extraterritorial effect” Ross observed of the state laws at issue in the Baldwin–Healy cases was that

each “deliberately prevented out-of-state firms from undertaking competitive pricing or deprived

businesses and consumers in other States of whatever competitive advantages they may possess.”

Ross, 598 U.S. at 374 (quoting Healy, 491 U.S. at 338–39) (citation modified). In other words,

they were discriminatory and protectionist. Thus, the Ellison court’s conclusion that the Minnesota

law was unconstitutional simply because it impacted the price of out-of-state transactions again

“reads too much” into the Baldwin–Healy cases. Id. at 373.

Judge Wynn’s dissent from the Fourth Circuit’s pre-Ross majority opinion in Frosh is

further illustrative of this point. The majority in Frosh struck down a materially similar Maryland

law regulating generic drug prices and, in doing so, read Baldwin and Healy broadly to stand for

the proposition that “the extraterritoriality principle is violated” whenever a state law regulates the

price of an out-of-state transaction. Frosh, 887 F.3d at 670. This is the very reading of the Baldwin–

Healy cases that the Supreme Court rejected in Ross. Anticipating that decision, Judge Wynn noted

in dissent that the Baldwin–Healy cases could not be reduced to forbidding the regulation of out-

of-state transactions, but rather turned on “the principle concerns animating the Supreme Court's

dormant Commerce Clause jurisprudence: economic protectionism, discrimination against

interstate commerce, and State regulation of a stream of transactions that never crosses through

the State's borders.” Id. at 684 (Wynn, J., dissenting). Like Legato Vapors and Midwest Title, Frosh

was decided based on a conception of the dormant Commerce Clause that the Supreme Court has

now rejected.

One final question demands an answer: does the Edgar plurality alone provide enough

support for AAM’s position? There are several reasons why this Court believes the answer is “no.”

First, the language in Edgar on which AAM relies did not “draw support from a majority of the

Court,” and the Seventh Circuit has declined to follow it, even in in situations where “th[e]

language, if controlling, would mean victory” for the plaintiff. See Alliant Energy Corp. v. Bie,

330 F.3d 904, 916 (7th Cir. 2003);2 see also CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69,

81 (1987) (“As the plurality opinion in MITE did not represent the views of a majority of the Court,

we are not bound by its reasoning.”). Second, this Court disagrees with AAM’s suggestion that

Ross somehow endorsed or preserved the extraterritoriality principle as conceptualized in Edgar.

To the contrary, the lone footnote in Ross discussing Edgar distinguished the cases on their facts

and went on to cast doubt on whether the state law in Edgar posed a dormant Commerce Clause

issue at all, or if it instead implicated horizontal separation of powers more broadly. Ross, 598 U.S.

at 376 n.1. This view of Edgar and the extraterritoriality principle has long been percolating among

scholars studying the penumbra surrounding the dormant Commerce Clause. See Donald H.

Regan, Siamese Essays: (I) CTS Corp. v. Dynamics Corp. of America and Dormant Commerce

Clause Doctrine; (II) Extraterritorial State Legislation, 85 Mich. L. Rev. 1865, 1884–97, 1904

(1987); Joondeph, supra, at 49, 62–70. Finally, the modern Supreme Court cases discussing the

dormant Commerce Clause frame the inquiry as a two-principle approach. Plaintiffs can either

challenge a state law because it (1) “discriminate[s] against interstate commerce” or (2) “impose[s]

an undue burden on interstate commerce” and flunks Pike balancing. Wayfair, 585 U.S. at 173;

see also Mallory v. Norfolk S. Ry. Co., 600 U.S. 122, 160 (2023) (Alito, J., concurring in part and

concurring in the judgment) (“Under our modern framework, a state law may offend the

Commerce Clause’s negative restrictions in two circumstances: when the law discriminates against

2 The Seventh Circuit’s opinion upon rehearing in Bie does not increase AAM’s likelihood of success on the merits.

If anything, that opinion reinforces this Court’s conclusion that, after Ross, the appropriate analysis for any dormant

Commerce Clause case involves only two theories: the antidiscrimination principle and Pike balancing. See Alliant

Energy Corp. v. Bie, 336 F.3d 545, 547 (7th Cir. 2003) (concluding a “two-tiered test” applies to all dormant

Commerce Clause challenges, including challenges to extraterritorial regulations).

interstate commerce or when it imposes ‘undue burdens’ on interstate commerce.”). The Supreme

Court’s omission of extraterritoriality from the discussion severely undercuts the doctrine’s

continuing viability.

While the Court is not persuaded by AAM’s extraterritoriality argument under the dormant

Commerce Clause, the Act may well be unconstitutional for some other reason. For example, it

may fail Pike balancing, violate the Due Process Clause, or run afoul of horizontal separation of

powers. See Frosh, 887 F.3d at 681 (Wynn, J., dissenting) (noting the “the availability of

potentially more appropriate constitutional provisions, like the Due Process Clause, to ensure that

States do not unduly extend their regulatory authority beyond their borders”). AAM raises these

arguments in separate counts of its Complaint, but did not present them in support of its Motion

for Preliminary Injunction. Thus, they will have to be addressed on another day. Cf. Epel, 793 F.3d

at 1172 (“[W]hether Colorado’s law survives the Pike or Philadelphia tests may be interesting

questions, but they are ones that will have to await resolution[.]”).

In summary, the Court finds that that AAM has failed to make a “strong showing” of its

likelihood of success on the merits. Bevis v. City of Naperville, Ill., 85 F.4th 1175, 1188 (7th Cir.

2023) (citation modified). This alone counsels against the entry of a preliminary injunction. See

Doe v. Univ. of S. Ind., 43 F.4th 784, 791 (7th Cir. 2022) (noting likelihood of success on the

merits is “often decisive,” eliminating the need to address the remaining elements). Nonetheless,

the Court addresses the remaining preliminary injunction factors briefly below.

II. Irreparable Harm

In its Order denying the Attorney General’s second motion to dismiss, this Court addressed

many of the relevant facts pertaining to the harm AAM and its members face. (See Dkt. 46 at 3–

4). At this stage, AAM must show that harm is “irreparable”—i.e., “legal remedies are inadequate

to cure it.” Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531, 545 (7th Cir. 2021). AAM offers two

theories on irreparable harm: (1) the existence of a “continuing constitutional violation” and (2)

unrecoverable economic losses. (Dkt. 52 at 16–17). Having failed to advance a theory that

persuasively demonstrates the Act’s constitutional infirmity, AAM’s first theory is insufficient to

establish irreparable harm. AAM has, however, demonstrated more than a mere possibility of

irreparable economic harm.

Rodney Emerson, the Vice President of Pricing and Contracts for Sandoz, Inc. (“Sandoz”),

one of AAM’s members, submitted a declaration describing the company’s decision to forego

specific drug price increases it had planned for calendar year 2024 because of the “significant

penalties and other monetary liability” it could face under the Act. (See Dkt. 54 ¶¶ 15–17). This

foregone revenue, Emerson avers, presents a real risk to Sandoz’s business and could force the

company to withdraw certain “generic or biosimilar products it currently sells nationwide.” (Id.

¶ 29). Sandoz attributes its previously planned price increases for one of its products to a variety

of factors, some tied to increased production costs and expanding access to the drug, and others

driven by “overall profit margins . . . and provid[ing] a greater return on investment for [Sandoz]

shareholders.” (Id. ¶ 18). AAM’s members have further demonstrated that they face a credible

threat of prosecution based on the existence of the Act alone. (See Dkt. 46 at 3–4); Bell v. Keating,

697 F.3d 445, 451 (7th Cir. 2012) (“The existence of the statute constitutes the government’s

commitment to prosecute in accordance with it and, thus, a concrete prospect of future harm for

one who would flout it.”).

The Court harbors some skepticism about the true scope of harm AAM’s members face

considering the Act excludes from the definition of price gouging “reasonably justified” price

increases tied to “an increase in the cost of producing the essential off-patent or generic drug” or

“appropriate expansion of access” to the drug. 410 Ill. Comp. Stat. 725/5. While Emerson suggests

that there are several factors relevant to Sandoz’s price increases that fall outside of these

categories, AAM has not offered any legal argument as to why, for example, “regulatory approval

costs” or “inflation” would not be excludable production costs. (Dkt. 54 ¶ 18). Nonetheless, there

are certain categories of price increases that certainly do fall outside these categories—like driving

shareholder value. In any event, the money AAM’s members are losing right now by way of

foregone price increases represent real business losses that must be taken into consideration. And

while economic losses alone are ordinarily insufficient to demonstrate irreparable harm, they may

be enough to justify injunctive relief when a post-merits damage remedy would be inadequate.

Gateway E. Ry. Co. v. Terminal R.R. Ass’n of St. Louis, 35 F.3d 1134, 1140 (7th Cir. 1994). That

is the case here, because AAM’s members will not be able to recover economic losses sustained

during the pendency of this litigation if they eventually prevail on the merits due to sovereign

immunity. See Staffing Servs. Ass’n of Illinois v. Flanagan, 720 F. Supp. 3d 627, 641 (N.D. Ill.

2024).

Considering the costs of complying with the Act, the possible penalties for violating the

Act, and detrimental business positions AAM’s members have already taken in response to the

Act, coupled with sovereign immunity, the Court finds that AAM has carried its burden in

establishing irreparable harm.

III. Balance of the Equities

Finally, the Court considers the balance of the equities and public interest. Since AAM’s

likelihood of success on the merits is low, the balance of harms must weigh decisively in its favor

to justify preliminary relief. Valencia v. City of Springfield, 883 F.3d 959, 966 (7th Cir. 2018). It

does not. See NetChoice, LLC v. Fitch, 2025 WL 2350189, at *1 (U.S. Aug. 14, 2025) (Kavanaugh,

J., concurring) (explaining a plaintiff must “sufficiently demonstrate[] that the balance of harms

and equities favor it” in justifying interim relief, even if it has shown a likelihood that the state law

at issue is unconstitutional).

AAM’s members face real harm because of the Act. It will undoubtedly burden their

bottom lines, may force them to make challenging business decision, and could result in significant

unrecoverable penalties. But it should go without saying that a state law’s impact on corporate

profits alone will never be enough to enjoin that law. This is especially true when compared to the

Attorney General’s strong interest in enforcing a statute that was duly enacted by the

representatives of the people of Illinois. See Maryland v. King, 567 U.S. 1301, 1303 (2012)

(Roberts, C.J., in chambers) (“[A]ny time a State is enjoined by a court from effectuating statutes

enacted by representatives of its people, it suffers a form of irreparable injury.”). Thus, absent a

colorable constitutional violation, the balance of harms favors the Attorney General. Both parties

make compelling arguments on the competing public interest considerations. Ballooning drug

prices are a significant concern for Illinoisans of all stripes, but especially for the most vulnerable

among us. The Attorney General has emphasized the public’s interest in having affordable access

to generic and biosimilar drugs and argues the Act is specifically designed to protect that access.

(See Dkt. 58 at 7–9). AAM posits the Act is harmful to the interest it is ostensibly designed to

protect because it may force generic manufacturers out of the market all together and “exacerbate

the drug-shortage problem.” (Dkt. 52 at 20). At best for AAM, the public interest considerations

are a wash at this early stage of the litigation. And a wash is not enough considering AAM’s low

likelihood of success on the merits, the competing harms, and the extraordinary form of relief

AAM seeks.

CONCLUSION

For the reasons set forth above, Plaintiffs’ Motion for Preliminary Injunction [51] is denied.

rginia M. Kendall

nited States District Judge

Date: September 26, 2025

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